A Manufacturing Company Is Considering Two Alternative Locations for a New

question 106

Essay

A manufacturing company is considering two alternative locations for a new facility. The fixed and variable costs for the two locations are found in the table below. For which volume of business would the two locations be equally attractive? If the company plans on producing 9,700 units, which location would be more attractive?
$$\begin{array} { | l | l | r | } \hline & \text { West } & \text { East } \\\hline \text { Fixed cost } & 125000 & 157000 \\\hline \text { Variable cost } & 18 & 14 \\\hline\end{array}$$

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